General | 22 February 2012

The end of the Stamp Duty holiday could be essential

The currently Stamp Duty exemption, allowing first-time buyers purchasing property worth under £250,000 off the 1% tax, will soon come to an end. From 24 March the threshold will be reduced to £125,000.

According to mortgagestrategy.co.uk, the average house price in Britain is approximately £160,000 meaning it will affect a large number of potential home owners.

A rise in the number of first-time buyers before the imminent end of the Stamp Duty holiday has been noted from several sources including the Council for Mortgage Lenders (CML) and the Royal Institute of Chartered Surveyors (RICS).

The Stamp Duty holiday has been scrapped however, due to allegedly being ineffective in boosting first-time buyer numbers overall.

George Osborne has promised to introduce a Mortgage Indemnity Guarantee for first-time buyers on new builds from March 2012. Under this scheme, the government will safeguard 95% mortgages for banks enabling higher lending for first-time buyers.

The government has noted that the new Mortgage Indemnity Guarantee can only be implemented if the current Stamp Duty holiday ends, making way for a larger number of first-time buyers to get a foot on the property ladder.